United States

ACC Bank Plc v Michael Byrne and Sean O’Toole 2014 IEHC 530

Overview
This case related to a claim by ACC Bank plc (the Bank) for a summary judgment against the first named defendant on foot of a personal guarantee of €250,000 in respect of a loan facility to a company, China Girls Limited (the Borrower) of €3.9m.

The Borrower failed to comply with its repayment obligations and the Bank sought payment from the defendants on foot of their guarantees.

The first defendant refused to pay on the following grounds:

That ADM Londis (Londis) was a co-guarantor of the loan and as the Bank had released Londis from the guarantee, the other sureties under the contract of guarantee are also released;

That the evidence produced by the Bank does not satisfy the provisions of the Bankers' Book of Evidence Act 1879-1989 and is therefore inadmissable.

The Londis Guarantee
The first defendant, Mr Byrne argued that the release by a creditor of one of a number of co-sureties under a contract of guarantee discharges the other co-sureties. An officer of the Bank, Ms Kavanagh refuted this argument by pointing out that the contracts of guarantee provided by the defendants were entirely separate and distinct from that provided by Londis. Mr Justice Cregan agreed and concluded that as such, the release of Londis under its guarantee, had no effect on the obligations of the defendants under their guarantees.

Mr Justice Cregan also noted that, despite arguments by the first defendant to the contrary, that the first defendant was aware of the terms of the Londis Guarantee, its duration and its expiry.

Bankers' Book of Evidence
The Bankers' Book of Evidence Act 1879 was amended by the Bankers' Book of Evidence (Amendment) Act 1959 and the Central Bank Act 1989 (together the 1879 Act). The resulting legislation has given rise to many difficulties in interpretation.

Mr Justice Cregan stated that the 1879 Act is a law to simplify the giving and taking of evidence in relation to bank statements and the like but if the proofs as detailed in the Act are not complied with, the evidence is not admissible. In his judgment, Mr Justice Cregan provided detailed consideration of the provisions of the 1879 Act relating to proofs that must be submitted by a bank in order to prove a debt.

Mr Justice Cregan concluded that the Bank's evidence did not meet the requirements of the 1879 Act. In relation to Section 4 of the 1879 Act, there was no formal proof that at the time of the making of the entry that the banker's book was one of the ordinary books of the Bank, that the entry was made in the usual and ordinary course of business and that the banker's book was in the custody or control of the Bank. In addition, the formal requirements of Section 5 of the 1879 Act (that the copy of an entry in a banker's book that is produced to the court must be compared and confirmed as having been cross-checked with the original) were also not complied with.